Lesotho Highlands Water Project (LHDA) Phase II – Polihali Dam

Access to water is a life-sustaining necessity, and initiatives like the Lesotho Highlands Water Project are pivotal in this regard. This project aims to alleviate water supply shortages in South Africa, increase power generation within Lesotho, and reduce its dependency on imported electricity. Currently in its second phase, the project involves building a third dam in Mokhotlong to feed into the existing Katse dam. The project, valued at over LSL40 billion, encompasses access roads, bridges, the main Polihali Dam, a transfer tunnel to Katse, and additional tourist and administrative facilities. Medium-term projections suggest that Lesotho’s economy will grow by an average of 2.9% annually, largely driven by the LHWP II, with GDP levels expected to return to pre-pandemic levels by 2024. 

Standard Lesotho Bank’s CIB facilitated the LHWP, through its Ecosystems approach. The approach has enabled the bank to become the primary adviser, transactional banker, and financier for contractors, subcontractors, and other stakeholders in the project’s value chain. As an authorised dealer, Standard Lesotho Bank facilitated complex regulatory approvals, making contracting possible and providing a bid, advance payment, and performance guarantees, along with financing for working capital and assets. It also facilitated approvals necessary to make payments on their contracts. 

From the project's inception, the Bank has assisted international contractors in navigating the local landscape. The bank provided guarantees and other funding solutions, enabling contractors to deliver on the project.